The pros and cons of a public inquiry into B.C. money laundering

WATCH: With Premier John Horgan expected to announce a public inquiry into money laundering on Wednesday, Richard Zussman has the potential benefits and drawbacks of such an investigation.

The British Columbia government will announce on Wednesday following a cabinet meeting whether it will go ahead with a public inquiry into money laundering in the province.

There are significant concerns about whether a public inquiry is the best way for the B.C. government to address widespread money laundering in the province’s casinos, housing market and luxury car industry.

Once the province signs off on the terms of reference, the power goes into the hands of the commission and the person appointed to oversee the public inquiry.

“A commission has the power to control its own processes and may make directives respecting practice and procedure to facilitate the just and timely fulfilment of its duties,” reads the act.

Here is a look at some of the potential pros and cons of a public inquiry into money laundering:

Pros

Naming names: One of the criticisms of Peter German’s two reports looking into money laundering is that blame has not been placed on anyone. A public inquiry would give the commissioner the power to name names and point fingers.

“The benefits at this stage, for the public, is knowing who knew what when — that piece of political accountability,” Attorney General David Eby said.

Criminal charges cannot stem from an inquiry, but an inquiry can lead to further investigations that lead to charges.

“It does not lay criminal charges, although it can refer matters to government for criminal or regulatory investigations,” German wrote in his latest report.

Exposing new loopholes: Both German reports revealed a huge number of loopholes that criminals have been using in order to launder money. Underground banking, private mortgages, minimal transparency on cash transactions and the use of numbered companies have all been used to move cash illegally with minimal detection.

But there could be more. The provincial government says an inquiry could lead to discovering other ways that money has been laundered and provide potential solutions on how to stop it.

Access to documents that normally could not be accessed: In August, Eby started asking for B.C. Liberal Leader Andrew Wilkinson’s help to waive cabinet privilege on documents from the previous government related to money laundering. The current government is still waiting.

A public inquiry could give the inquiry commission access to those documents and would allow the public to judge whether the previous government made the correct decisions.

“We asked to have any of the information they had produced, and they refused to do so,” Premier John Horgan said.

“The decisions of the former government are sealed for a period of time, and the new government does not have access. I believe the public should be able to see what the former government knew and when they knew it. An inquiry would assist in getting that information.”

Subpoena power: Public inquiries give commissioners the power of subpoena. This means politicians, casino staff and law enforcement officials could be subpoenaed and required by law to testify.

The poll, released in February, found that 76 per cent of respondents supported a public inquiry.

Ipsos found support for a public inquiry among just about every group that responded to the poll — women and men, high school- and university-educated British Columbians and more.

The inquiry also has the support of politicians, including Port Coquitlam Mayor Brad West, Vancouver Coun. Christine Boyle and B.C. Green Party Leader Andrew Weaver.

Removing power from politicians: There are significant questions about what decisions were made by the government involving money laundering.

West has argued that it doesn’t make sense to allow politicians to investigate themselves. A public inquiry would take the power out of the hands of politicians and put it in the hands of an independent investigator.

“What I am is pissed off,” West said. “Again, what you have here is clear evidence that a lot of people knew what was going on… and the people responsible for doing something about it, to address the issue, didn’t do anything.

“We need to get this issue out of the hands of the politicians and into the hands of a public inquiry so we can put an end to this nightmare that has been inflicting our province for far too long.”

Cons

Takes a long time: The last provincial public inquiry was held to look into Robert Pickton and murdered and missing women in B.C. Wally Oppal was hired on Sept. 27, 2010 to head the inquiry, and he produced his final report on Nov. 22, 2012.

The more than two-year inquiry led to over 60 recommendations, but there has still been no movement on some of the major suggestions. Oppal recommended the need for a regional police force in Metro Vancouver, for example, but the government has turned that down.

Costs a lot of money: Public inquiries aren’t cheap. Horgan has quipped that inquiries are a good way for lawyers to make money.

The Missing Women Commission of Inquiry cost the province about $10 million, while the federal government spent about $32 million on the Air India Inquiry.

Quebec’s Charbonneau Commission, which has often been viewed as something B.C. should emulate, took four years and cost close to $45 million.

Witnesses can lawyer up: Not only are lawyers expensive, but they can grind the whole process to a halt. In public inquiries, anyone who is subpoenaed has the option to hire a lawyer, and most do.

Those witnesses are often restricted in what they can say and, in some cases, never say anything before the inquiry.

Ongoing investigations: Both Horgan and Eby have said they don’t want to decide on a public inquiry until they are sure it would not impact ongoing investigations into money laundering.

The federal government has also been unwilling to pledge full commitment to any inquiry for the same reason.

“We have been co-operating, working very collaboratively and working very closely with what B.C. has done so far,” Minister of Border Security and Organized Crime Reduction Bill Blair said.

“My only concern is I would not do anything to interfere with ongoing investigations.”

May not learn anything new: It is no secret that money laundering has had significant impact on the housing market. It’s also no secret that bags of money have been moved through B.C. casinos.

If the goal is solely to figure out what happened and how to fix it, an inquiry could fall short because of the work that has already been done by German and Maureen Maloney, both of whom authored reports on money laundering in the province.

“A decision would also have to consider whether there is a need for greater public awareness than already exists, whether current recommendations for change suffice and the viability of criminal or regulatory investigations after a lengthy inquiry,” German wrote.

Not solving the problem: A public inquiry can name names, but it can’t solve any problems. Eby says the province is already making changes to get money laundering out of the province but is not confident that a public inquiry would add anything to actually fixing the system.

“A public inquiry would certainly be an answer around the chronology on how we got here. I don’t think a public inquiry would be the answer to stopping it — that is about policing, and we have a very good road map around that now,” Eby said.